Securities Broker Business Strengthening Policy, 2083 Implemented: Stock Brokers to Be Classified into Four Categories
The Nepal Securities Board has implemented the Securities Broker Business Strengthening Policy, 2083. This policy will classify brokers into four categories based on capital, risk-bearing capacity, and service diversification. It also mandates margin trading, short selling, digital KYC, and cybersecurity, among other things.
The Nepal Securities Board (SEBON) has implemented the Securities Broker Business Strengthening Policy, 2083, in accordance with the Ministry of Finance's 'Capital Market Strengthening and Revival Action Plan, 2083'. The main objective of this policy is to make the securities brokerage business competitive, technology-friendly, and institutionally strong.
Under the new policy, brokers will be classified into four categories based on their capital, risk-bearing capacity, and service diversification:
- Securities Trader (Category 'Ka')
- Full-Service Securities Broker (Category 'Kha')
- Transaction-Oriented Securities Broker (Category 'Ga')
- Specialized Securities Broker (Category 'Gha')
The policy has provisions for separate approvals for margin trading, short selling, intra-day trading, and market makers. Likewise, digital KYC, multi-factor authentication, cybersecurity, IT audit, and risk-based capital adequacy have been made mandatory.
To facilitate mergers and acquisitions among brokerage businesses and bring existing brokers up to the new standards, a transitional period will be provided. The policy will be implemented in 3 phases, focusing on institutional strengthening, market service expansion, and the development of an integrated securities intermediation system, according to a notice issued by the Board's Assistant Spokesperson, Tolakant Neupane.